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CAI

Consumer Awareness Institute

Non-profit Corporation

MLM PRODUCTS  
Are MLM products overpriced? 
Can they be purchased for less? 
Are MLM promoters' claims about their supplements valid? ( See bottom two sections.)

How do prices for products from MLM companies compare with alternative outlets?

       Not very well. In spite of the claims of MLM/DSA communicators that most MLM participants sign up to buy the products at a discount or to resell them for “a little extra income,” the facts do not support either claim. MLM products purchased at wholesale prices are so expensive that few persons can be successful in selling them at retail prices for a profit. Also, since MLM sponsors have struck a deal with state tax commissioners, requiring sales taxes to be paid on wholesale purchases, and since shipping charges to one's home must be added, the margin is too slim to provide much incentive for direct selling to non-participants.
      To check this out, I asked representatives from ten MLM companies for the prices of their "best reasonably priced formulation of multi-vitamin multi-mineral products, with antioxidant protection." Then I asked ten retailers of health foods likewise to give me prices for their " best reasonably priced formulation of multi-vitamin multi-mineral products, with antioxidant protection." Interestingly, representatives for each of the health food stores recommended a different product. Here are the results:

      The same observation could be made for other products and services offered by MLM companies – telecommunications, Internet services, fuel additives, financial services, etc. They must claim uniqueness and they must charge enough to support payments to a bloated organization of thousands of "distributors."
NOTE: To see a powerful example of how overpriced some MLM products can be, see the YouTube video on USANA prices by Barry Minkow of Fraud Discovery Institute.

Another option for getting MLM products cheap - ebay! 

     If you really want some specific MLM products, but don't want to pay exorbitant prices, there is another option some people are discovering – ebay.  Ex-participants often seek to unload these overpriced "potions & lotions" – or other MLM products far below wholesale! Just click on the "Buy" tab, select the product category (such as "health & beauty"), enter the name of the company, click "search," and see what you get. Here are some examples: For Usana, I found (among a variety of Usana products) Healthpak 100 going for about $34 (US) plus shipping. For Pharmanex (Nu Skin), I found LifePak for $0.99 (US) plus shipping. Melaleuca's Vitality Mineral Complex was going for $2.01 (US) plus shipping.

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Opinions of experts about "potions and lotions" typically offered by MLM companies 

After studying over 250 MLM programs, it has become apparent that a typical strategy of MLM sponsors is to produce supplements that supposedly cure or prevent every disease under the sun. It seems nearly every MLM company lays claim to the latest and greatest supplement  that cannot be obtained anywhere else at a comparable price. They even claim to “bypass the middle man,” when in fact with their endless chain of recruitment, they create thousands of middle men– all hoping for a share of commissions. (See "Typical Misrepresentations . . " used in MLM recruiting and "5 Red Flags of a Product-based Pyramid Scheme" and other reports on the MLM Regulation and MLM Research pages of this web site.)
       I consulted three experts on the validity of typical claims by MLM companies about the superior benefits of their products, which are used to justify their high prices. To protect their professional reputations, I am not publishing the full names of two of them.
       The first was Lane, a nutritional scientist and the former vice president of product development for one of the leading MLM's, who told me that the product claims of these companies are overblown and misleading. “The modern version of snake oil,” he called them. He said the supplement industry is rife with people making fraudulent claims, especially MLM promoters. He was very critical of MLM sponsors who promote products with exotic secret ingredients obtained from some remote island, etc. He said the best way to get needed vitamins and minerals is from a healthy diet.
      The second was Allen, a nutritional formulator who has manufactured numerous supplements for both MLM companies and standard supplement companies that sell to health food stores. “This is a scumbag business,” he grumbled. He told of his desire to get MLM promoters to buy quality formulations, using top-quality ingredients. He said that In every case, they chose to cut corners so as to allow plenty of margin to pay their many levels of distributors. For example, if a product sold for $50, they would not pay over $5 in production costs.
      The third is Dr. Stephen Barrett, a medical doctor who has spent many years exposing all kinds of health quackery. He also recommends a healthy diet as the best source of needed nutrients. However, there are special cases where supplementation is needed, and this should be done in consultation with your doctor. Read his report on Quackwatch. He also has done much writing and research on MLM supplementation. Check out his many articles on MLM Watch.
      I have read reports that many nutritional scientists do take supplements, but usually in modest amounts, not megadoses. They often explain their use of supplements as “insurance” to make sure they get what they may be missing in their diet. But they buy reasonably priced supplements and focus on a nutritionally sound diet.  

Does anti-oxidant supplementation extend life and improve general health?

A review of dozens of studies delivers blow to popular antioxidants.
Researcher found that the popular antioxidant vitamin E doesn't lead to a longer life. Neither do vitamins A or C. But experts are divided on whether that means you should skip the pills altogether. 
(MSNBC-  Associated Press, Updated: 4:18 p.m. MT Feb 27, 2007) 

Antioxidant vitamins, including A, E and C, don’t help you live longer, according to an analysis of dozens of studies of these popular supplements. The new review showing no long-life benefit from those vitamins, plus beta carotene and selenium, adds to growing evidence questioning the value of these supplements.
       Some experts said, however, that it’s too early to toss out all vitamin pills — or the possibility that they may have some health benefits. Others said the study supports the theory that antioxidants work best when they are consumed in food rather than pills.
         An estimated 80 million to 160 million people take antioxidants in North America and Europe, about 10 to 20 percent of adults, the study’s authors said. And last year, Americans spent $2.3 billion on nutritional supplements and vitamins at grocery stores, drug stores and retail outlets, excluding Wal-Mart, according to Information Resources Inc., which tracks sales.
       The new study, appearing in Wednesday’s Journal of the American Medical Association, was led by the Cochrane Hepato-Biliary Group at Copenhagen University Hospital in Denmark. The Cochrane organization is a respected international network of experts that conducts systematic reviews of scientific evidence on health interventions.
        For the new report on antioxidants, the researchers first analyzed 68 studies involving 232,606 people and found no significant effect on mortality — neither good nor bad — linked to taking antioxidants. Read the full news report. Read also the report released on the Today Show.

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